RPT-At Galaxy unveiling, Samsung will have insurance plan in back pocket

Thu Mar 14, 2013 12:59pm EDT
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* Backup plan aims to avoid repeat of last year's costly supply disruption

* Analysts warn Samsung may have raised consumer expectations too high

* Stakes for Samsung high on product that delivers its biggest profits

By Miyoung Kim

SEOUL, March 13 (Reuters) - The success of Samsung Electronics Co's latest Galaxy phone, set to be launched in New York on Thursday, could hinge on a supply backup plan aimed at preventing a repeat of a costly snag for its premium smartphone last year.

Some analysts predict the new Galaxy S IV could top 10 million unit sales in the first month after its launch, so any hiccups in the smooth delivery of core components could be disastrous.

The risks are high. A simple manufacturing snafu involving unsatisfactory design of handset cases cost Samsung some 2 million units of lost sales in just a month after it launched the S III in May last year.

"There could be, again, a supply bottleneck due to tight supply of components... but I think any such disruption will be very brief, as Samsung is making a bigger bet on the S IV than on its predecessor with a backup plan to avoid such disruption," said Greg Noh, an analyst at HMC Investment and Securities.   Continued...